Last week I wrote that the Ministry of Finance had not yet announced whether it would extend the temporary law giving additional exemptions from capital gains tax for the sale of residential apartments that has been in effect for the past two years and that was slated to end at the end of December 2012.
This situation made it impossible for owners of multiple apartments who were considering selling them from making any tax plan for themselves at all.
I guess someone up there was listening. On Tuesday evening it was announced that the special additional exemptions will continue until May 2013.
According to the law, anyone owning more than one residential apartment could only sell one apartment with an exemption from capital gains tax once every 4 years. Under the temporary law which has now been extended, an apartment owner is entitled to two more exemptions provided that the price of the apartment sold does not exceed 2,200,000 NIS.
In addition to this, apartments that had been rented out for commercial use were not entitled to exemptions from capital gains tax. Now, under this temporary law, sellers of apartments such as these are also entitled to exemptions provided that the purchaser uses the apartment for residential purposes.